EconomicsNotes

Strangely enough for something which has long been characterised as a dismal profession, there are quite a few jokes and wry observations which originate with economists or economic historians, and more which have been enjoyed by them. Many of these observations have a ring of truth about them. One I like is adapted from psychiatry; economics has physics envy.   That is to say, economists have often been characterised as people who would like to be like physicists, with ‘laws’ like those of Thermodynamics, and verifiable Bolzmann constants and so forth. Some economists have taken this approach further and have embraced Quantum economics, claiming, like Paul Ormerod, that this is a helpful perspective from which to try to understand money. People who are this certain about economics often end up so entangled in their own theories and arguments, and so disassociated from the world, that one wonders if they have any understanding of physics at all.   These circumstances are somew...

All Economics Courses for A-Level and High School Students, and most foundation and introductory courses at university, will require you to learn about Aggregate Demand. A very basic introduction to AD is below.     Aggregate Demand, in one classic formulation, is the total amount that all the sectors of the economy willingly spend in a given period. It combines all the demand in all markets of an economy. There is a simple formulation in A-level of the elements of AD:  C+I+G+X-M . This is a combination which reflects Consumption, Investment, Government net spending, and net exports. You should recall that in the macroeconomic world, multiple things act upon each other at all times. This means that you cannot isolate a cause or effect of changes to the exclusion of everything else, as you can in microeconomics. There are certain things we can say, however. Most   movements along the AD curve  are caused by changes in the price level. Inflation changes expectatio...